Money Market Rates Mixed on Banks Placement, Borrowing
The money market rates closed on a mixed note, as deposit money banks’ placements at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) window were offset by some operators borrowing.
Amid these mixed actions, the financial system’s liquidity was robust, and the sufficient balance influenced the direction of money market rates.
Broadstreet investment analysts reported that liquidity in the banking system opened the day with a slightly improved surplus balance of ₦3.82 trillion.
This translated into a moderate increase compared with N3.76 trillion on record the previous day, reflecting a day-on-day increase of 58.00 billion, AIICO Capital Limited said in a note.
This sustained surplus was mainly supported by ₦3.75 trillion in banks’ placements at the CBN’s SDF window, and also by inflows of ₦535.61 million from Primary Market Repayments.
AIICO Capital reported that the balance was slightly offset by ₦28.00 billion borrowing at the Standing Lending Facility (SLF) window. However, despite improved liquidity levels, average funding cost rose by 5bps to 22.16%.
The Open Repo Rate (OPR) remained steady at 22.00%, while the Overnight Rate (OVN) climbed 11bps to 22.31%. Analysts said they expected coupon inflows from 17-Apr-29 bond to boost liquidity levels, barring any funding activities.
Hence, Nigerian Interbank Offered Rates closed on a mixed note on Thursday, with the overnight rate holding steady at 22.29%, reflecting stable system liquidity.
The 1-month tenor bucked the trend, declining 8bps, while the 3-month and 6-month tenors edged higher by 0.2bp and 4bps, respectively, according to a note released by Cowry Asset Limited.
In the Treasury Bills secondary market, the average yield dipped 2bps to 17.42%, reflecting increased investor demand as a more positive tone began to pervade the fixed-income space. MTN Suspends Airtime, Data Lending Services
